Tencent Holdings ( TCEHY Quick Quote TCEHY - Free Report) is set to report fourth-quarter 2020 results on Mar 24. Notably, the company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one, the average surprise being 5.21%. The Zacks Consensus Estimate for fourth-quarter earnings has remained steady at 50 cents over the past 30 days. The figure suggests growth of 31.5% from the figure reported in the year-ago quarter. Further, the consensus mark for revenues currently stands at $19.5 billion, indicating growth of 29.9% from the figure reported in the year-ago quarter. Let’s see how things have shaped up for this announcement. Key Factors to Watch
Tencent’s fourth-quarter 2020 results are expected to reflect strength in its rich gaming portfolio as well as strong distribution capability, especially as users followed social distancing guidelines due to the coronavirus outbreak.
Moreover, the launch of
Take-Two Interactive Software’s ( TTWO Quick Quote TTWO - Free Report) Kerbal Space Program on Tencent's WeGame platform in China is a key catalyst. Also, growth in digital content revenues, owing to video streaming subscriptions and live broadcast services including HUYA’s live streaming service, is expected to have aided social network revenues, especially as millions of people practiced social distancing. Further, momentum in cloud services is expected to have continued, owing to fast penetration into key sectors, including finance. This is expected to have driven FinTech and Business Services revenues in the to-be-reported quarter. Online advertising revenues are expected to have benefited from wider adoption of its algorithmic advertisement buying solutions and improving advertiser spending. Markedly, by category, this Zacks Rank #3 (Hold) company witnessed rapid growth in advertising spending from sectors such as education, Internet services and e-commerce and recovered demand from sectors such as real estate and automobiles in the third quarter. This trend is expected to have continued in the to-be reported quarter as well. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. However, media advertising revenues from platforms, including Tencent News, are expected to have taken a hit due to weak demand for brand ad and delayed content production in the quarter under review. Zacks Top 10 Stocks for 2021
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